Winning Wasn't Everything

Jim Dougherty exposed insurance fraud for Lloyd's of London -- until they concluded the Miami Beach lawyer had overbilled them by millions. Now the U.S. attorney is involved and things have turned very ugly, indeed.

The next day Ladikos filed an internal affairs complaint. Two Hallandale police officers who had been called to the scene by Seraydar were interviewed by internal affairs. Both said Seraydar had identified himself to them as a Miami Beach cop. Investigators eventually substantiated the claims that Seraydar had violated department rules by working as a private investigator and running an unauthorized check on a license plate. (Ironically, they also determined that Seraydar was not a licensed private investigator at the time he searched Ladikos's home.) The unauthorized license check could be interpreted as an act of "official misconduct," a third-degree felony. Seraydar was suspended for two days. (Despite having been specifically advised during the Ladikos case that he was not to work as a private investigator, Seraydar would later admit to internal affairs officers that he had accepted a subsequent case in which he taped a subject without his consent, a third-degree felony in Florida. He received a letter of reprimand.)

Ladikos filed suit against Seraydar, Miami Beach, and Lloyd's of London. He agreed to drop Seraydar and the city from the suit after receiving a $27,500 settlement in July 1992. This settlement was, at the city's behest, paid in full by Jim Dougherty.

Throughout the Ladikos imbroglio, Seraydar insisted he received no money from Dougherty for his work, nor any later payments. But Dougherty's own records indicate Seraydar was paid nearly $8000 in the six months after his visit to Ladikos, including a check from Dougherty for $450 eleven days after the incident, and another for $2500 a month later.

Because the matter is still under litigation, Seraydar himself would not comment on the Ladikos case or his involvement with Dougherty other than to say, "Jim's one hell of a trial attorney. This whole thing with Lloyd's of London is the only time I've ever seen someone win all his cases and still get fired."

The journalists who covered the Bank of Credit and Commerce International tend to share Seraydar's assessment. "An alumnus of Notre Dame and a U.S. Marine Corps veteran of Vietnam, Dougherty is a cantankerous bulldog of a man," Peter Truell and Larry Gurwin write in their 1992 book False Profits. "He is a tenacious investigator and a fearsome courtroom warrior."

Jonathan Beaty and S.C. Gwynne offer this emphatic second in their 1993 volume Outlaw Bank: "Of the many obsessive hunters of BCCI, none was more zealous than James F. Dougherty II. Dougherty was a startling character: a theatrical, hyperactive bundle of aggression who could not sit still. He kept automatic pistols in several drawers in his office and in each room of his Miami Beach home. He was ex-Notre Dame, ex-U.S. Army in Vietnam, and was definitely not someone you wanted to cross.... Dougherty had built the most comprehensive database anywhere on the activities of a BCCI branch. For reporters covering the BCCI story -- many of whom eventually got access to Dougherty's files -- it was nothing short of miraculous."

Equally miraculous was Dougherty's ability to enhance his reputation, and to assail Munther Bilbeisi's, through the media. During the frenzy of the BCCI scandal, his office became an epicenter of reportorial activity, from which emanated articles in publications ranging from Truell's Wall Street Journal to Time magazine, where Beaty and Gwynne worked. He assisted reporters in stories that linked Bilbeisi and BCCI to villains as disparate as Manuel Noriega and the Mob. Often the ties between these entities were tenuous at best, but reporters usually listened to Dougherty.

The reason was simple: He had sheaves of documents. In the summer of 1991, with BCCI under siege by tight-lipped federal agents, Dougherty won permission to inspect on behalf of Lloyd's the confidential records of the bank's Miami and Boca Raton branches, and to depose the bankruptcy liquidators who were tallying assets. "Any information we gathered was supposed to be top-secret," says Dougherty's former colleague Richard Lehrman. "But I found out later that Jim was on the phone with every reporter who wanted to write about BCCI. We were like a treasure trove to them."

At one point, Lehrman recalls, Richard Duncan of London's Financial Times published a front-page story based on information leaked by someone intimately familiar with the BCCI investigation. One of the BCCI liquidators demanded that sanctions be imposed on the responsible party. Thus ensued a three-way phone discussion among Dougherty, reporter Duncan, and Lehrman in which Dougherty asked Duncan to write an affidavit swearing he was not the leak. Lehrman persuaded his boss that such a document would only incriminate him; the matter was later forgotten anyhow. (Duncan declined to comment about the alleged discussion.)

This was not the only manner in which the garrulous lawyer is said to have stretched ethical boundaries with reporters. Dougherty was forever trying to buy them meals, drinks, even hotel rooms. In 1991, for example, he paid more than $500 to put up Duncan for two nights at Manhattan's posh Peninsula Hotel. Duncan admits Dougherty picked up the tab, but he insists it was against his wishes. "He paid the bill and left before I got downstairs," Duncan says today. "When I got back to London, I told my editor, and we sent a letter to Jim asking him to supply us a bill so we could reimburse him. He never responded and we let it slip. We still owe him that money."

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